ANALYSIS-Toxic fish could help Obama hit 2020 climate goal
* EPA mercury rule seen next year
* Bernstein says EPA pollutant rules to shut coal plants
* Utilities may sue to slow or stop rules
By Timothy Gardner
WASHINGTON, July 26 (Reuters) - A proposed rule on mercury, a pollutant bad for fish and the people who eat too many of them, could help the Obama administration get near its short-term climate goal -- even if Congress fails this year or next to pass a bill tackling greenhouse gases directly.
Senate Democrats crafting an energy bill have abandoned until September, and probably through the rest of the year, debate on climate measures like carbon caps on power plants and mandates for utilities to produce more power from renewable sources like wind and solar.
But while many people concerned about climate control have been focusing on the Senate, the Environmental Protection Agency (EPA), under its Administrator Lisa Jackson, has been quietly preparing to crack down on coal, the most carbon-intensive fuel, like never before.
Under Jackson, a former chemical engineer for an oil company who says the idea that progress on environment has to hurt the economy is a "false choice," the agency late last year declared that greenhouse gases endanger human health and welfare.
The EPA has begun to take steps on regulating greenhouse gases from autos, power plants and factories.
But it is the agency's looming rules on mainstream pollutants, those that can cause diseases, that may limit carbon dioxide emissions the most.
While the EPA is considering a raft of new rules surrounding coal, its upcoming rule on emissions of mercury, which go up smokestacks at coal-fired power plants and enter the ecosystem, could pack the biggest punch.
The rule, which the EPA was forced by court to issue by November 2011, will likely help escort many of the oldest and dirtiest emitters of carbon into early retirement.
Environmental groups and a nurses' group sued the EPA to issue the rules.
MERCURY ACCUMULATES IN FISH
That is because scientists say mercury from coal accumulates in many fish. Children and babies exposed to the metal, through mother's milk or eating contaminated fish, are at risk of learning and developmental problems. Adults who eat too many of the fish also face risks.
The EPA would likely have to start enforcing the rules three years after issuing them.
When combined with the EPA's other current and coming rules on "criteria" pollutants, like ones that cause acid rain and smog, the mercury measure would force utilities to invest tens of millions of dollars on technologies to remove the substances.
Many of those plants are about 50 years old and are already inefficient.
"Those investments are just not going to be justifiable," said Dan Bakal, director of electric power programs at Ceres, a group of environmentalists and institutional investors.
Francois Broquin, a co-author of reports on coal by Bernstein Research, said the combined rules could push as much as 20 percent of U.S. coal-fired electric generation capacity to retire by 2015. "Obviously that will have an impact," he said.
Frank O'Donnell, the president of the environmental group Clean Air Watch, said that if a large chunk of the coal-fired power fleet went into retirement it could help the country exceed Obama's goal of reducing greenhouse gas emissions by about 17 percent from 2005 levels by 2020.
"We've thought for a long time that proper enforcement of the Clean Air Act, laws already on the books, can have the unintended benefit of really doing something on climate," he said.
The environmental think tank the World Resources Institute said on Friday that aggressive action on existing federal government rules and state plans could reduce emissions almost as much as Obama wants by 2020. But it said implementation of the looming mercury and other rules could get even closer.
Utilities would likely build plants to burn natural gas, which emits half the carbon that coal does, as the main alternative. Alternative energy like wind and solar power, which provided the most new U.S. electricity capacity last year, could also become more attractive to utilities.
To be sure, the rate of retirements may also depend on the price of natural gas, which is relatively cheap now as new drilling technologies have granted access to vast new supplies.
In addition, coal companies and utilities could sue to stop or delay the rules from being implemented.
But several utilities, including Duke Energy, have already announced plans to shut coal plants.
They know the EPA is also considering rules such as regulating coal ash waste after a dike ruptured in 2008 at a Tennessee Valley Authority coal plant, unleashing a slurry gush that flattened houses. The disaster could take up to $900 million to clean up.
Additional rules on chemicals that cause smog would add new costs either to comply with or fight in court.
EPA rules alone would not get to the huge reductions of 80 percent of greenhouse gases by 2050 that scientists say are required to stop the world from suffering the worst effects of climate change. Ultimately Congress would have to form a national rule to achieve those cuts.
Until that happens, the EPA rules could serve as a bridge.
"These rules are not going to get all the way (to Obama's 2020 goal) but they are a first and important step," Bernstein Research's Broquin said. (Reporting by Timothy Gardner, editing by Anthony Barker)
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